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Financial Planning / Tax Strategies


Subject:  Re: Why Not Take Gains in UTMA? Date:  2/8/2013  9:52 PM
Author:  MurrayS Number:  117700 of 124776

As a recap, the first $950 of your child's income is not taxed. The next $950 is taxed at her tax rates. The ordinary tax rate on that part of her income is 10%. So if any of that income is long term capital gains or qualified dividends, it gets a special tax rate of 0%.

Indeed, the proceeds from bond fund dividends is only about $150. From the sound of it, if non qualified dividends, interest & short term gains total less than $950, that income will be covered by the exemption, does that sound correct?

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